Foreign portfolio investors as soon as once more turned in direction of Dalal Street to buy Indian equities, spending in Rs 33,487 crore throughout 15 sectors, in the primary half of February. The bulk of the inflows went into capital items, monetary providers and oil & fuel shares, marking the strongest fortnightly shopping for seen because the second half of April 2025. Capital items shares attracted the best inflows, drawing Rs 8,032 crore between February 1 and 15, in contrast with Rs 2,761 crore in January. The authorities’s Rs 4,470 crore stake sale in BHEL partly supported the sector’s momentum. “The capital goods sector has underperformed the market, and there was nothing negative in the budget on the sector which could have prompted global investors to reallocate funds,” stated Siddarth Bhamre, head of Research, Asit C Mehta Intermediates informed ET. According to Rajesh Singhla, CEO & fund supervisor at Alpha AIF, the US-India commerce deal framework introduced in the primary week of February additionally lifted sentiment in segments reminiscent of capital items, textiles, gems and jewelry, serving to draw overseas cash. Financial providers witnessed a turnaround, receiving Rs 6,175 crore in the primary fortnight of February after dealing with outflows of Rs 8,592 crore in January. Singhla stated robust third-quarter earnings from banks and monetary firms might have supported investor curiosity, though he famous that valuations in the sector stay unappealing. Foreign investors additionally purchased Rs 4,678 crore price of oil & fuel shares throughout the interval.Why is IT nonetheless failing to draw? Despite the broader shopping for, abroad investors continued to exit some sectors. They bought Rs 13,812 crore throughout eight sectors in the primary half of February, with data know-how bearing the brunt. IT alone accounted for greater than Rs 10,000 crore of the outflows. The sector has been below sustained stress in 2025, with almost Rs 75,000 crore price of shares offloaded to date, the best amongst all sectors, amid issues that AI-led disruption might have an effect on the outlook for software program providers exporters. “Fears of AI making the sector less labour-intensive could spark further selling,” stated Bhamre. “Overseas investors have shifted allocation from services to pockets in the real economy in this fortnight.” Market efficiency displays the pattern. The Nifty IT index has declined almost 15% to date this 12 months, in contrast with a 2.6% drop in the benchmark Nifty. Singhla, nevertheless, prompt the sell-off might have been extreme. “The foreign selling in IT stocks was due to fears of the earnings trending lower as the threat of disruptions due to AI loomed large, but most of the selling was sentimental, and the sell-off was an overreaction,” he stated.
